Good morning. Good morning, everyone, and thank you for being here. Welcome to the Annual Shareholders Meeting for JPMorgan Chase. We're going to have a short video to begin the meeting, after which Jamie Dimon and our General Counsel, Stacy Friedman, will come up and begin the formal proceedings. So if you could please start the video.
It was a very difficult time after Katrina. We really were concerned that people wouldn't step in, that the investments wouldn't come forward and that we wouldn't be able to get the city and region back up and running.
We had a significant number of
the local team who were displaced because of the flooding and damage to their homes.
Re launching the recovery in the early days, it was crystal clear that there was a vacuum with respect to how we would pull ourselves together as a community.
What we saw actually happen was not only a strength and resilience in the people of New Orleans, but funders and nonprofits and civic leaders standing up and showing up because
of private sector partners like JPMorgan Chase, the city has begun to reconstruct itself and demonstrate to the rest of America how you can actually come back from a great tragedy. It's what I call this New Orleans Way.
We've seen revitalization of neighborhoods, not only with the capital reinvestment, but also in terms of the human reinvestment.
The City of New Orleans always prides itself on diversity. This isn't just racial diversity. This is economic diversity as well.
Our challenge really is to make sure that we don't leave any segment of this community behind that everybody has an equal right to participate in the economic resurgence of New Orleans.
People knew that there was a vested interest around redeveloping this quarter as a kind of a spine to the redevelopment in Central City.
We were one of the earliest investors in both OC Halley and in Tramey. We're very proud of that. We have seen anchor institutions such as the Ase Cultural Arts Center. We have seen good network and capital investments that pretty much serves as a magnet for people and for capital.
JPMorgan Chase has been a part of accepting inclusiveness and diversity as a major component to what it is they do, how they think about our community.
The other space that we've seen investments make a difference is in the community development landscape.
Lafitte Corridor is just a beautiful expression of what that private sector investment looks like laid on top of public work. We've changed that from being a housing project to being a neighborhood.
The Broad Street Refresh project is very exciting. It's an area of the city that prior to 2,005 may have been somewhat overlooked.
And those are tangible results of a philosophy that I believe is manifest now in the city of New Orleans. So the partnership has been great for us.
The investment in New Orleans is just a continuation of our fundamental philosophy that we can do well by doing good because at the end of the day, JPMorgan Chase will continue to
invest in Good morning, ladies and gentlemen. It's 10 am and I'm pleased to call to order the Annual Meeting of the Shareholders of JPMorgan Chase and Company. I am Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase and Chairman of this meeting. The video you just saw shows our extensive commitment to the city and the people of New Orleans and in the audience today are a number of our employees from New Orleans area. I'd like to thank all of them for all the things you can do for your community.
It's really deeply appreciated. So a special welcome. With me today is Stacy Freeman, our new General Counsel and our old General Counsel over there too and we're pleased to have him still with us. But he is happy and she's staying up here as Secretary is meeting and she will lead us through the agenda. Stacy?
Thank you, Jamie. Thank you everybody for coming today. I want to add my welcome to everybody who's here and thanks to New Orleans for having us. Hopefully some of you are not just shareholders, you're also customers. We have folks with us here today from the Executive Office.
Larry Tote, are you somewhere in the back right there? If you have any questions or you need anything about the services that we offer or questions you have about the way you interact with us today, please find Larry. He's got a team with us out front. They'll be here after the meeting or available to meet with you. As a reminder, just to go through a few formalities, no personal devices, cell phones, other electronic equipment, mobile devices record, photograph or video the meeting, that's prohibited.
Let's turn to the order of the business today. I have the affidavit of mailing of the notice of the meeting, the proxy statements, the form of the proxy and the annual report. The shareholder list is available for inspection and representatives of IVS Associates Inc. Have been appointed to serve as inspectors of the election. The meeting is properly convened, a quorum is present and the proposed resolution set forth in the proxy statement will be filed as part of these proceedings.
It is 10:0:3 a. M. And the polls are now open and will remain open until we announce that they have closed. We've received proxies up in Intel just before the beginning of this meeting, representing about 80 7.9 outstanding shares eligible to vote and these have been voted in accordance with the shareholders' wishes. If there are shareholders here today who wish who have not yet submitted their proxies and would like to do so, we'll collect them after all the proposals and the Q and A and once they're submitted, they will be reflected in the final vote.
As a reminder, today's remarks may contain forward looking statements. Please refer to the agenda, our annual report filed on Form 10 ks with the SEC and our disclaimer regarding such statements. That completes the necessities and the formalities. Jamie, you will next introduce the directors and comment on the state of the company.
So I'd like to first recognize our directors. I'm going to ask each director to stand when I introduce you. Please hold your applause after all directors are introduced. Your directors are Linda Baumann, James Bell, Crandall Baals, Steven Burke, Jim Crown, Tim Flynn, Labe Jackson, Michael Neal, Lee Raymond and Bill Weldon. Thank you.
I am very proud to tell you that the dedication and commitment of your directors play a huge part in making this a great company. In addition to the directors, we also have with us today, Catherine Kaminsky, our audit partner from PricewaterhouseCoopers. Catherine, thank you for being here. Might stand up just so they know you're there. So we're pleased to be in New Orleans today, a city where we've been doing business for 180 years.
Since the founding of our predecessor bank, we've been deploying capital and providing credit in support of New Orleans, its businesses and its residents. We're also partnering with not for profits, business and civic leaders to foster growth and to create jobs. We have more than 2,700 employees in Louisiana, more than 1,000,000 customers and we bank 78,000 small businesses. Since Hurricane Katrina in 2,005, JPMorgan Chase has given $36,000,000 to not for profits working in Louisiana and has lent or invested over 8 $100,000,000 to build 7,500 units of affordable housing statewide as well as grocery stores, hospitals and daycare facilities. New Orleans is a great example of our company at work.
We're putting our resources, the expertise of our people, our data and our relationships into action to help this community and those who live and work here. Now I'll turn to your company's performance for 2015. Last year, JPMorgan Chase earned a record $24,400,000,000 in net income on revenue of 96,600,000,000 dollars In fact, we have delivered record results in the last 5 6 years and we hope to continue to deliver in the future. Our financial results reflect strong underlying performance across our businesses. Importantly, we exceeded all our major financial commitments, balance sheet optimization, capital deployment, GSIB surcharge reduction and expense cuts.
Aside from our financial performance, our company continues to support customers, business and communities. During the course of 2015, JPMorgan Chase provided credit or raised capital of more than $2,000,000,000,000 for our clients ranging from big companies to small businesses, investors and individuals as well as countries and their sovereign institutions. In addition, we've hired more than 10,000 military veterans since 2011 as the founding member of the 100,000 jobs mission, which now has a goal of buying a 1000000 jobs for veterans. Now let's look at our franchises which are strong and getting stronger. When I travel around the world and we do business in over 100 countries, our clients are almost uniformly pleased with us.
In fact, most cities, states and countries want more of JPMorgan Chase. Want us to bring more of our resources from our financial capabilities and technology to our human capital and expertise to their communities. We do not know what the next few years may bring. We are confident the needs of our clients around the world will continue to grow and our consistent strategy of building for the future and being there for our clients in good times and bad has put us in very good stead. Whatever the future brings, we believe that we will face it from a position of strength and stability.
Today virtually all of our businesses are close to best in class and overhead ratios and in return on tangible equity. In addition, our business have been gaining market share in recent years and that can only happen if we're creating happy clients. And importantly, we continue to make sizable investments for the future. These investments are in technology and infrastructure as well as other organic growth opportunities including new retail branches, new wholesale branches outside the United States, new Chase private client locations, commercial banking expansion cities and the addition of small business bankers. We're focused on other exciting we also focus on other exciting investments and innovative initiatives including digital banking, payments, big data, segmentation, electronic trading in the IB and the JPMorgan Chase Institute.
As we continue to build for the long term and serve our clients and our communities, we know there's nothing more important than to protect our company going forward so we can continue to be here for all those who count on us. So we've taken many acts to make the company stronger and safer including our fortress balance sheet has been hit with enhanced capital liquidity, our ability to survive extreme stress, our extensive de risking and simplification of the business and the building of Fortress controls and meeting far more stringent regulatory standards. Taken together, these actions enabled us to make extraordinary progress towards reducing and ultimately eliminating the risk of JPMorgan Chase failing and the cause of any failure being borne by the American taxpayer or the U. S. Economy.
And we have an extraordinary amount of capital to sustain us in the event of losses. JPMorgan Chase alone has enough loss absorbing resource to bear all the losses assumed by the Fed stress test of the 31 largest banks in total in the United States. Because of the regulations and higher capital, large banks in the United States are far stronger. Overall, rest assured that JPMorgan Chase is well positioned regardless of cycles, market volatility or other geopolitical risks has always prepared for the toughest of times. As we look ahead, I want to point out the strong banking system is absolutely critical to a country's success.
For the people of a country to thrive, you need to have a successful economy and markets. An economy to be successful is an absolute necessity to have a healthy and successful banking system. The United States is a large vibrant financial system from asset managers and private equity sponsor to hedge funds, non banks, venture capitalists, public and private market participants, small to large investors and banks. Banks are at the core of the system. They educate the world about companies and markets, they syndicate credit and market risk, they hold and move money in assets and they necessarily create discipline among borrowers and transparency in the markets.
To do this well, America needs all different kinds of financial institutions and all different kinds of banks, large and small. Not only are America's largest banks global leaders, but they help set global standards for financial markets, companies and even countries in controls such as anti money laundering. Finally, banks bring huge resources, financial and knowledge to America's major flagship companies and investors thereby helping them to maintain their global leadership positions. Most banks actually are trusted by their clients, but generically they are not. We believe the way that the only way to restore to a position of trust to earn it every day in every community and with every client.
To do that there's no simple answer other than maintain steadfast, consistent and transparent behavior where we operate, communicate honestly, clearly and consistently, deliver great products and services, admitting to mistakes is good, but fixing them is better and learning from them is essential, make it easy for customers to deal with you, particularly when they have problems, work with customers who are struggling, both individuals and companies, focus the customer and treat all the clients the way you want to be treated, be great citizens in the community, establish strong relationships with governments and civic society, treat regulators like full partners and accept they will not always agree, but when they make change in regulations, even ones you don't like, accept them and move on. As an industry makes fewer mistakes and behave better, that bad behavior of any one individual reverberates and affect the entire industry. Finally, strong regulators and stronger standards for banks must ultimately mean that banks are meeting more rigorous standards. Every bank is doing everything in the power to meet regulatory standards. It has been 8 years since the financial crisis and 6 years since Dodd Frank.
Regulation should take more credit for the extraordinary amount that has been accomplished and they should state this clearly to the American public. This should help improve consumer confidence in the banking system and in the economy in general. I'd like to spend a minute talking about what works and what doesn't work. In my job, I'm fortunate to be able to travel around the world and meet presidents, Prime Ministers, Chief Executive Officers, not for profit directors and other influential civic leaders. All of them want a better future for the country and their people.
What I've learned from them is that while politics hard in my view much harder than business, breeding mistrust and misunderstanding makes the political environment far worse. Nearly always collaboration, rational thinking and analysis make the situation better. Solutions are not always easy to find, but they are almost always there. What doesn't work? Treating every decision like it is binary, my way or your way.
Most decisions are not binary and there's usually better answers waiting to be found if you do the analysis and involve the right people. Drawing strawman or a scapegoat does not work. These generally are subtle attempts to oversimplify someone's position in order to attack it, resulting in anger, misunderstanding and mistrust. Denigrating a whole class of society, this is always wrong and just another form of prejudice. 1 of the greatest men in American history, President Abraham Lincoln never drew straw men, never scapegoated and never denigrated any class society even though he probably had more reasons to do it than many.
In the same breath, some of our politicians extoll his virtues while violating them. Equating perception with reality, this is a tough one because you have to deal with both perceptions and reality. However, perceptions that are real are completely different than perceptions that are false and how you deal with them each should probably differ. Treating someone's comments is their complaints. When someone's response to an issue raises here they go complaining again, that reaction diminishes their point of view and diminishes that person.
When a person complains, you should always ask the question, are they right or are they wrong? What does work? Collaborating and compromising. They are a necessity and a democracy. Also, you can compromise without violating your principles, but it's nearly impossible to compromise when you turn principles into ideology.
Listening carefully to each other, make an effort to understand when someone is right and acknowledge it, each of us should read and listen to great thinkers who have an alternative point of view. Constantly openly and thoroughly reviewing institutions, programs and politics, analyze what is working, what is not working and then figure out together how you can make it better. Let me close by thanking our nearly 250 1,000 employees including our senior management team and our Board of Directors. Our Board is fully engaged in all the critical matters of the company from setting the agenda and the Board meeting to reviewing strategy determining CEO compensation and succession plan. Lee Raymond is going to stand up in a minute and describe some of their processes.
Importantly, they meet without the CEO at every Board meeting and they're increasingly engaged in regulatory and shareholder affairs. We also have a strong corporate culture that will continue to fortify and make sure its enduring strength of this institution. We have an exceptional global management team comprised of individuals who have significant tenure at the company and are focused on getting things done and done right. There's a good team of senior leaders as I've ever it's as good a team of senior leaders as I've ever had the privilege to work with. They all possess exceptional character, culture and capabilities.
I'm honored to work at this company and with its outstanding people. What they have accomplished during these often difficult circumstances in the last 10 years has been extraordinary. I love seeing our people close-up in action. I'd like to end by expressing deep gratitude to all the employees of JPMorgan Chase. Lee, the floor is yours.
Thank you, Jamie. On behalf of my colleagues on the Board, I'd like to thank our fellow shareholders of JPMorgan for participating in today's meeting. For those of you who are employee shareholders, let me also take a moment to thank you for the work you do for the good of our company. Jamie has spoken to you about the performance of the company, which has continued to well serve our clients and customers and to support sustained shareholder value. For my remarks, I thought it would be useful to comment on the role of the Board, our approach to compensation, the continued importance of culture and conduct and the value of shareholder engagement.
We view the core Board function as providing oversight on matters that are most important to shareholder value and to meet the regulatory expectations. That includes understanding and approving the Company's strategic plan, monitoring the Company's financial performance, planning for CEO and other senior executive succession, overseeing the risk management and internal control frameworks and reinforcing and communicating the tone at the top for the company's values and culture. We seek to achieve these goals primarily through active Board engagement, and I will give you three examples today. First, we use Board meetings and other events to satisfy ourselves that management's major company executives are thoroughly evaluated. Directors have direct access to all company executives at every level.
It is the Board practice to stay informed and ask probing questions of management. Where the Board considers appropriate, we do provide input and advice. 2nd, we are thoughtful about how we structure our Board meetings. The Board approves matters to be included on the Board and committee agendas, including the types of matters and information that we ask that management bring to the attention of the Board in a timely fashion. And at each Board meeting, the Board meets in executive session without the CEO or other members of management being present.
3rd, we assess performance. This includes providing feedback on senior management's performance and holding management accountable when appropriate, as well as assessing our own Board performance. To make this more concrete, I want to walk you through the Board's approach to compensation as a good example of how your Board approaches major issues. Broadly speaking, the Board regularly reviews compensation practices to align them with what we believe to be the best interest of our shareholders. The Board takes a holistic and discretionary approach in determining compensation, considering both company and individual performance.
More specifically, the Board assesses performance against 4 broad categories: Business Results, Risk and Control, customer and clients, and people management and leadership. We assess performance not only for the most recent year, but over a multi year period. It is a very continuous process. We have been consistent in following this approach for many years and believe it has resulted in compensation outcomes that have been both appropriate for management and for shareholders. For Jamie as CEO, the Board's decision to increase his 2015 compensation reflects both his demonstrated leadership in driving exceptional firm wide performance, that being both financial and non financial on a multiyear basis.
This includes strong financial results and progress on long term objectives, significant enhancements to our control environment and reinforcement of the company's culture, continued market leadership of our franchises and significant investment in our people to develop the outstanding talent we have across the company. All of Jamie's equity incentive compensation was awarded in the form of performance share units, which I will refer to in just a moment. Speaking more broadly, culture and conduct remain a continuing focus for the Board. We want the tone from the top to resonate at all levels of the company. Management has, with Board oversight, taken substantial steps to reaffirm the historic commitment of the company and to each employee to do 1st class business in a 1st class way.
Among many steps last year, the Board amended the charter of the Compensation and Management Development Committee to give it responsibility for assisting the Board in its oversight of the company's culture and conduct programs. Turning to shareholder engagement, the Board benefits from and considers your feedback. Last year, we heard shareholders ask about why don't we tie the vesting of a portion of incentive awards to a predetermined performance metric as opposed to simply time. We followed up on this feedback with further extensive shareholder engagement. We had nearly 100 discussions with shareholders representing more than 40 A consistent theme was that a portion of long term incentives should be tied to quantifiable financial performance measures.
Following that deliberation, in January 2016, the Board approved the new PSU program for the operating committee members, which is described in detail in the proxy statement. Taken together, I believe the Board has served shareholders well this year, including through its active oversight of matters on compensation, driving forward culture and through shareholder engagement. That concludes my report. And now again, I'd like to turn it back over to Jamie for the rest of the meeting. Jamie?
Thank you, Lee. Thank you, Jamie. It's now time to turn to the shareholder and the management proposals. I will introduce the management proposals first and then invite the shareholder proponents to introduce their proposals. After all the proposals have been introduced, we'll then have a general Q and A session.
I would ask that you hold your questions, whether they're on a proposal or comments or for other matters, until that general Q and A session. On the management proposals, there are 3. I now move for approval of all 3 of them. 1st, the election of the directors 2nd, an advisory resolution to approve executive compensation 3rd, ratification of the independent registered public accounting firm PricewaterhouseCoopers, representative of which is here today. I'm now going to ask the shareholder proponents to introduce their proposals.
Proponents, we do ask that you limit your time to 3 minutes and confine your comments to the subject of the matter of the proposal. Be sure that all proponents we want to make sure that all proponents have an opportunity to speak today and we have time at the end. There are clocks with lights that will yellow after 2 minutes and red after 3 minutes. I think you'll be able to see those. There's 2 standing microphones in the middle of the room After I've recognized you, please proceed to the microphone nearest you.
We ask that other speakers do allow the shareholder proposals to go first and then we'll come back to Q and A at the end. So the first proposal I'm going to turn to from shareholders is Proposal 4 to require an independent Chair. Proposal 4 was submitted by Mr. William Steiner. We've been advised that Mr.
Bartlett Naylor will present this proposal. Mr. Naylor, are you ready?
Thank you, Madam Counsel. Mr. Chairman, I move proposal number 4 as provided in the proxy. Since I will be, actually, as you know, introducing 4 other resolutions, let me just be indulged for a minute to explain who I am and who public citizen is. We're often minimized as a left wing progressive group.
But I would like you to understand that we've been on the vanguard of some initiatives that are commonplace. Our founder wrote a book called Unsafe at Any Speed. And today, I think no responsible parent would put their child in the back seat without a seat belt. We have a platinum litigation team where of the 100 Supreme Court cases that are heard each year, between 13 are argued by a public citizen attorney. We were central in the advancement of Dodd Frank.
In fact, when a Harvard professor wrote her paper that was the basis of the Consumer Financial Protection Bureau, she named it unsafe at any rate in
clear Oman.
Mr. Naylor, if I could
If you're going to interrupt me, then I assume that you are inviting that.
Mr. Naylor, I would ask that we move through the order of the agenda first. If we could hit your proposals, we'll have some Q and A after. I know we have a limited amount of time. I want to make sure we give you time to hit this proposal.
Number 4, do you want to turn to that first?
So the 12 seconds you've just used are my second. Thank you. While many of these proposals have been, if you will, on the edge, the one that I'm advancing now regarding an independent chair is very much in the mainstream. It's common sense. It's health food.
How is it that CEO can oversee himself as Chair? I think it makes no sense at all. When this company lost $6,000,000,000 because it could not understand what its quants were doing in London, a shareholder was paying that. And what is he supposed to do as a shareholder, but calls his chair only to find out the chair is the same person. And when this person advances a shareholder proposal, the company uses shareholder money to contest this.
So I think the company should simply accept this. You have a lead director with great skill and acknowledge that a Chair represents shareholders and it's an inherent conflict that he not be also the CEO. Thank you.
Thank you. We oppose this resolution and our reasons for doing so appear on Page 85 of the proxy. We'll next turn to proposal number 5, how votes are counted using only for and against and to ignore abstentions. Proposal 5 was submitted by Ms. Mercy Rome and the Equality Network Foundation.
We've been advised that Mr. Bartlett Naylor will also present this proposal. Mr. Naylor, would you
like to turn to that now? Yes, thank you. I propose this as explained in the proxy. To expand, there are those who ask why is it that shareholders tolerate misconduct, poor management and so forth. And I think this resolution typifies it.
All this resolution says is to urge the most euphemistic of Episcopalian language, I use that religion because it's the religion of our founder, simply urging and yet this modest proposal is contested by JPMorgan not this year with no action letter, but in years past. And you say that basically 87% of the vote is represented here, but 13% you're going to say is automatically counted against. I think this is common sense. The fact that you would not even wish to be urged, I think epitomizes what is disabling about true shareholder governance and keeping shareholder concerns front and center with management? Thank you.
Management opposes this proposal and this resolution and the reasons for doing so are appear on Page 88 of the proxy statement. We'll now turn to proposal number 6, the prohibition of vesting of equity based awards for senior executives due to voluntary resignation to inter government service. Proposal 6 was submitted by the AFL CIO Reserve Fund and we've been advised that Ms. Anand will present this proposal. Ms.
Anand, will you proceed?
Thank you. My name is Venita Anand and I represent the AFL CIO Reserve Fund. I'd like to introduce our stockholder proposal urging the Board of Directors to ban the practice of giving preferential treatment of equity awards to executives who join the government. Typically, executives are rewarded with equity when they fulfill the eligibility requirements for tenure or performance. If they leave early, they forfeit the awards.
That has been understood for a long time by anybody at any company who receives equity awards. But here at JP Morgan, executives receive a windfall when they join the government, even if they quit before they meet the eligibility requirements. The company maintains that the provision does not result in a windfall because it merely removes court and impediment for those taking government jobs. I'm not going to quibble over semantics. The proxy statement says very clearly that under the government office provision, all outstanding equity awards continue to vest even after the executives quit to take a government job.
The point of vetting requirements, as I understand it and as I think other people understand, is to retain valuable employees. So giving the full equity awards to those who leave to join the government may give executives an incentive to quit prematurely to pursue those jobs. It also makes a mockery of the tenure of performance eligibility requirements. Government service is commendable. I don't argue with that.
But we don't believe that shareholders should be asked to subsidize executives' career choices through the acceleration of equity awards that would otherwise be forfeited after voluntary resignation. To my knowledge, no other industry provides government service goals in parachutes. The proxy statement states that this provision is intended to enable us to hire the best and brightest employees. However, commercial banks such as Wells Fargo, Bank of America do not offer such a benefit. Employees forfeit awards if they quit to take a job with the government before they meet the eligibility requirements.
Government service Golden Parachutes also raise troubling public policy concerns, Providing a financial incentive to enter government service creates the appearance of a revolving door between Wall Street and financial regulators. And I believe I heard you say that you want strong regulators. The financial system is in fact more secure when the public has full confidence in the independence and objectivity of market regulators. I have here 3 petitions signed by 44,000 people urging JPMorgan and other Wall Street Banks to ban government service goals and parachutes. Petitions were organized by the Air Force CIO, public citizens and Americans for Financial Reform.
I'll be happy to give you a copy of the petition, Ms. Diamond, and I hope you will accept it. The issue is not going to go away. We hope you will be an industry leader and ban these kinds of parachutes. Thank you.
Thank you.
We oppose this resolution and our reasons for doing so appear on page 89 of the proxy. We'll now turn back to proposal number 7 to address whether divestiture of all non core banking business segments would enhance shareholder value. This proposal was submitted by Mr. Bartlett Naylor and we've been advised that Mr. Naylor will present this as well.
Mr. Naylor?
Thank you, Madam Counsel. I hereby move proposal number 7 as provided in the proxy. This proposal urges the bank to undertake a study of whether or not shareholder value would be improved by, in my view, returning to the days of Last Eagle when commercial and investment banking was separate. I think the events since 2,008 have made it clear that there are numerous hazards within the fact that the liabilities, the $1,300,000,000,000 of liabilities of JPMorgan are subsidized, socialized with taxpayer guarantee. It's called the Federal Deposit Insurance Corp.
I think the fact that we had to bail out the large banks in 2,000 and 8 proved that the bank is too big to fail. This is understood by essentially every politician in Washington, including the House Banking Chairman, Jeb Hengelings, who is a conservative Republican, who will be putting forth a bill shortly, which reflects the fact that he believes that JPMorgan is too big to fail. The massive rap sheet on JPMorgan, which you can see, for example, on a website of The New York Times, for example, manipulation of foreign exchange, of the London Interbank offered rate, of energy markets, of fraud in the mortgage suggest that management is not able to oversee carefully such that they do not engage in misconduct. The bank is too big to jail. And then finally, the fact that after months of examination with outside commissioned experts looking at your London Whale episode could not find the simple fact that it was not a hedge.
That took a set of banking committee investigation. I think the bank is too big to manage. Your living will is some 200,000 pages long. That is an unfathomable length. And the fact that you failed your living will test a few weeks ago, I think portends that you may well fail it again because I don't think anybody can read 200,000 pages in a day, let alone decide whether or not they actually can pull this plug and dissolve this bank as the Section 165 provides in the Dodd Frank.
So because this bank, in my opinion, is too big to fail, too big to jail, too big to manage, I think you should at the very least undertake a study with independently commissioned experts to decide if this bank would be worth more in parts. Thank you.
Thank you. We oppose this resolution. And our reasons for doing so appear on Page 91 of the proxy. Proposal number 8 is to defer any compensation for 10 years to help satisfy any monetary penalty associated with the violation of law. Proposal 8 was submitted by Mr.
Kenneth Steiner And we've been advised that Mr. Naylor will present on that also. Mr. Naylor?
Madam Counsel, cultural wreckage that was Wall Street said that something needed to be done to attune management incentives to proper conduct. And he said that there should be deferred pay put into a pot by senior managers whose staff guesses that's about 1,000 people. And should the bank engage in misconduct which it would have to pay a penalty, that pot would be used first. You might say, well, those managers may or may not have been personally responsible. Well, that's true.
And yet now the $30,000,000,000 plus that have been paid in penalties have been shouldered by we shareholders. And I promise you the Sisters of Charity were not responsible for these frauds. Management was responsible. You needn't watch television too long before you hear the reprise that nobody has been sent to jail, unlike the 1,000 savings and loan executives who went to jail. You oppose this because you say that your current policy is stronger and that you even provide transparency.
Though I'm not aware of money of individuals other than a handful in the London Whale case where you actually have in fact clawed back money. So I think that, while this will attract a different type of banker to JPMorgan. I think that's the type of banker we want to attract, somebody who is a Boy Scout, who is committed to making JPMorgan a fair intermediator between savers and users of capital and not somebody who, in the case that we've seen unfortunately in the last half dozen years has decided to go off the rails of the law to make money for our company. Thank you.
Thank you. We oppose this resolution. Our reasons for doing so appear on Page 94 of the proxy statement. Proposal number 9 is to adopt a balanced executive compensation philosophy with social factors to improve the firm's ethical conduct and public reputation. The proposal was submitted by Xin Zhao.
We've been advised that Mr. Naylor will also present this proposal. Mr. Naylor?
Thank you, Madam Counsel. I move Proposal 9 as provided in the proxy. Mr. Jing Zhao is an interesting person and asks a very simple request that your pay be respectful for the yawning income gap, not only in the United States, but across the planet. We pay our leading hedge fund managers upwards of $2,500,000 an hour, dollars 700 a second.
That's twice the income, annual income of the Congo. He asked that you be mindful of that. You oppose this resolution, although I actually don't see anything in here that degrades or derides the goals. In fact, you seem to honor the goals. You say at one point that your pay provides no special perquisites.
That caught my eye because I've been reading about the so called sons and daughters program in China. I was privileged to work for Senator Proxmire who authored the Foreign Corrupt Practices Act, which says that you're not supposed to bribe foreign officials even if it's sort of cultural custom in that country. I am concerned that while your opposition to this evinces excellent choice of words that you don't actually mount a very formidable defense of why Mr. Zheng Zhao's resolution. Finally, let me just explain that Mr.
Zheng Zhao is not a dispassionate observer. He himself was a Chinese dissident. And he thought that when he was emailing on Yahoo! In China that those conversations were privileged. He in fact was jailed when those emails were turned into the government and he was expelled in imprint, the footprint of JPMorgan and other international companies can do for better or for worse.
And I think he implores you to set a very high example. Thank you.
Thank you. We oppose this resolution as well. Our reasons for doing so appear on Page 96 of the proxy statement. With that, we've completed the introduction of the shareholder proposals. We oppose them for the reasons set forth in the proxy statement.
I'm now going to turn to agenda item 3, the general discussion. We are ready for any general questions or comments from shareholders, after which we will close the polls and present the preliminary voting results. There are 2 standing microphones as I pointed out earlier. If you wish to address the meeting, please proceed to the microphone nearest to you and take your place in line. When addressing the meeting, we ask that you state your name, mention whether you are a shareholder.
As a reminder, we do ask that everybody limit their comments to 3 minutes. And to allow everybody the opportunity to speak, we will try and limit a discussion matter to 10 minutes total on any topic. Please direct your questions to our CEO and Chairman, Mr. Diamond. Do we have any questions from the audience?
I'll turn to agenda item 4. Our discussion period has now ended. Please submit any remaining ballots and proxies. Hold up your ballot if you have 1 and somebody will come collect it. After that, I declare the polls closed at 10:43 a.
M. We've concluded the formal portion of our meeting. I will now read the preliminary voting results that were received immediately prior to the meeting, the final voting results will be reported on a Form 8 ks that will be filed with the SEC and also the minutes of the meeting. With respect to the election of the directors, all directors were elected and each director received a majority of the votes cast for and against. No director received less than 96% of the votes cast.
With respect to the other proposals today, the results I read will be the percentage voted for each proposal based on shares marked for, against or abstain. For Proposal 2, this was the vote of the advisory resolution to approve executive compensation, 91.74. Percent. Proposal 3, the vote for ratification of our independent auditor PWC was 98.4% for proposal 4 for approval of the independent Board Chairman was 32.9% for proposal 5, the proposal regarding how votes are counted was 7.8% for Proposal 6, the vote regarding vesting for government service was 25.7% for Proposal 7 regarding the appointing of a shareholder value committee was 2.9 percent for Proposal 8 regarding the Klaubach amendment was 4.1% 4. Proposal 9 regarding executive compensation philosophy was 4.7percent4.
Sami, do you want to say a few last words? Yes.
So we greatly appreciate the views of all of our shareholders and how thoughtful they were engaging us. The entire Board takes their feedback very seriously and we'll continue to incorporate their input in how we govern the company. We'll continue to build towards being a best in class company in every way, shape and
form. I
think that concludes all of the business, Jamie. If you want to move to adjourn the meeting, now is the time.
Do I hear a motion for adjournment? So moved. Accepted. Thank you. Folks, thank you for visiting with us this time.
Thank you.